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Shareholder perks range from cheaper restaurant bills to a free day at the
races, but are all the deals and discounts worth it?

Shareholder perks, where investors in a business benefited from an array of
discounts and freebies as a privilege that came with owning a slice of the
business, are more rare today than in the past.

Turn the clock back 20 years, when most shares were issued in the form of
paper certificates, and private investors were a far greater force, and such
perks were much more common. They included seriously generous discounts on
groceries, travel tickets, holidays and much more.

The rise of big institutional investors put paid to many of these arrangements
but there are still some welcome perks, provided you know where to find them
and, more importantly, how to claim them.

The announcement caused some excitement. Small investors who buy in are
offered a double-whammy: the chance to participate in the business’s
hoped-for success as with any shareholding and, the icing on the cake,
discounted tickets to its attractions. Merlin’s announcement, with this
direct appeal to private investors, put shareholder perks back in the
limelight.

What perks is Merlin offering?

Investors who buy £1,000 worth of shares will be given a 30pc discount on
either two adult Merlin Annual Passes, which cost £119 each, or one Family
Merlin Annual Pass, priced from £356 for a family of four.

A family buying and using the Family Pass save £107, which represents a
theoretical “loyalty yield” of 10.7pc for £1,000 worth of shares.

This is arguably an attractive option for investors who like the look of
Merlin and who have young children, but there are plenty of money-off
voucher deals also available which can net you a similar discount without
your having to put capital at risk.

Do I always have to invest that much?

If you do not want to gamble so much capital there are “cheaper” perks
available, where your stake does not have to be as large. Some companies,
such as BT (LSE: BT-A.L - news) , Marks & Spencer (Other OTC: MAKSF - news) and Restaurant Group (LSE: RTN.L - news) , offer perks where
shareholders own as little as just one share.

But don’t expect too much. Buying just one share in BT for (currently £3.65)
can get you slightly cheaper broadband, along with a wine voucher worth £30,
which you have to spend with one firm.

A £4.88 share in Marks & Spencer will earn you a booklet of vouchers
giving a one-off discount of 10pc across a range of shopping, while a £5.66
share in Restaurant Group will get you discounts of 25pc which can apply to
12 meals during the course of a year at a number of food chains, including
Chiquito and Frankie & Benny’s.

As ever, it’s a matter of risk and return

The better perks do tend to require more commitment, and therefore the
shouldering of greater risk, from investors. Some give shareholders
unlimited discounts, such as Bloomsbury, the publisher. Anyone owning 200
shares (equating to £34) can get 35pc off all books published under the
Bloomsbury imprint. Provided you like the authors on Bloomsbury’s catalogue,
this is perhaps the best perk available. For just £100 spent on books you
will have got your money back.

Other enticing perks include British Airways, now quoted as International
Consolidated Airlines Group, gives shareholders 10pc discounts on fares from
or within the UK (albeit with some restrictions). Another is TUI Travel (LSE: TT.L - news) ,
which owns the First Choice brand and is offering up to £80 off holiday
bookings for 500 shares (worth £189).

Young & Co’s Brewery gives its shareholders around 50pc off its hotels.
One share in the firm costs £9.98, while the half-price hotel saving
typically stands at £55.

Other perks offer free event tickets. Newbury Racecourse offers its
shareholders two day member badges to a horse racing event of their choice.

Some others offer savings on food and drink. For instance the English wine
maker Chapel Down Group gives its shareholders with holdings of £400 a 33pc
discount on its products, which include prize-winning sparkling wines.

It is not only shares that come with perks attached. “Mini bonds”,
fixed-interest investments targeted at individuals, sometimes include perks.
For instance, Hotel Chocolat gives out a box of chocolates every two months
to bondholders, while John Lewis offered vouchers to those who bought its
bonds in 2011 as part of the income. Unlike shares, these bonds are not
traded on a stock market.

The perks that are not worth it

A number of perks on offer are simply not worth it. In order to receive a
one-off 25pc discount voucher in clothes retailer Next, an investor needs to
buy 500 shares. With shares priced at £52 it becomes rather expensive,
necessitating a £26,000 stake.

The price of the perk is also not attractive for shareholders of Telecom Plus.
In order to bag a 10pc discount on your broadband or phone line you will
need to buy £21,450 worth of shares.

Guy Ellison, head of equity research at Investec Wealth & Investment, said
savers should view perks with a pinch of salt. “Some perks offered by
companies have failed to move with the times and are no longer the added
bonus for shareholders they once were. Next is a great example. The offer
was attractive when the shares were a lot lower but not for £26,000,” he
said.

Sheridan Admans, of the broker the Share Centre, said investors should beware
buying shares in a company just to take advantage of the perks on offer.
“While many companies offer these shareholder perks, investors should never
make an investment decision solely on the basis of the perks available,” he
said. “Investors must remember that these benefits are subject to change and
have no bearing on the performance of the stock.”

How to make sure your broker gives you the perks

To be eligible for the perks it’s often best to hold paper share certificates
in your own name. But this form of share ownership is increasingly unusual
nowadays when most people hold nominee accounts through major brokers such
as Hargreaves Lansdown (LSE: HL.L - news) or Barclays Stockbrokers.

Where you have a nominee account, brokers do allow you to claim any discount
or perk you are entitled to, but you will have to ask your broker to confirm
your holding. There may be a fee for this service.

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